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Transport Modal Choice by Multinational Firms: Firm-level Evidence from Southeast Asia

Discussion Papers

No.318

November 2011

ABSTRACT

We examine transport modal decision by multinational firms to shed light on the role of freight logistics in multinational activity. Using a firm-level survey in Southeast Asia, we show that foreign ownership has a significantly positive and quantitatively large impact on the likelihood that air/sea transportation is chosen relative to truck shipping. This result is robust to the shipping distance, cross-border freight, and transport infrastructure. Both foreign-owned exporters and importers also tend to use air/sea transportation. Thus, our analysis presents a new distinction between multinational and domestic firms in their decision over transport modes.

Keywords: Transport mode, Logistics, Multinational firms, Multinomial logit
JEL classification: F15, F23, R41

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